The NFT Marketplace: How Non-Fungible Tokens Have Become So Popular
Notable tech and media investors are jumping on the digital goldmine that has permeated the digital economy, the NFT marketplace.
Twitter CEO Jack Dorsey created an NFT from his first-ever tweet about Twitter in December 2020 and sold it for 2.9 million dollars. This shows that you can make an NFT out of digital assets supported by the platform.
Why Is the NFT Marketplace Gaining Prominence?
Before 2017, no one thought that the world will consider things such as pictures, paintings, tweets, GIFs, and videos as crypto investment assets. Fast forward to the present moment, we can see that the NFTs have become digital assets recognized and accepted in the crypto world. According to Non-Fungible.com, the average price of an NFT was 807.52 USD in 2021.
SkyQuest Technology capped the value of the Global Non-Fungible Tokens (NFTs) Market at USD 15.70 Billion in 2021 and expected it to reach USD 122.43 Billion by 2028, with a 34.10 % CAGR during the forecast period of 2022 – 2028. The rising demand for digital art collectables and other factors are responsible for this market estimate.
The first known NFT was created in May 2014 precisely by Kevin McCoy and his wife Anil Dash and got sold for $4 during a live presentation in New York. It gained popularity when CryptoKitties launched. Cryptokitties was a blockchain-based game where players profit by selling tradable virtual cat NFTs.
While the NFT market was stable from that period, it blew up in 2021 due to the rise in demand and supply chain, and the launch of NBA Top Shot by the creators of CryptoKitties.
Another major contributing factor to the sudden rise of NFTs was Christie’s “Everydays: The First 5,000 Days” phenomenal sale. Mike Winkelmann, a graphic designer better known in the online art world as “Beeple” created the collage and sold it for $69.3m. It was a collage of 5,000 pieces of digital art produced daily by Beeple since 2007.
How NFTs Work
To understand how NFT works, you need to understand its concept. NFTs or Non-Fungible Tokens are digital assets with values that cannot be exchanged or replaced. You can exchange a cryptocurrency with another and get the same value with other cryptocurrencies but not with NFT.
NFTS uses the same security and authentication system as the Blockchain. Using the same system means that NFTs are minted through smart contracts that help in assigning ownership and managing the transfer of the NFTs. This explains why it is highly secure and safe. NFT can be in different digital forms ranging from photos, GIFs, videos, assets in a game, and digital paintings. Most NFTs use Ethereum (ETH) so are compatible with Ethereum-based projects.
For instance, if there is a painter who wants to do an online exhibition of their art or paintings. They can be concerned about the safety of their work.
NFTs can help them secure their art collectibles through the Blockchain system so that no one can steal or claim their art. Many artists now look to NFTs to help them create value and profits for their work.
How to Utilize the NFT Marketplace
Having understood the NFT and how it works, you want to know how you can make good use of the Ethereum-based platform. Here are some ways in which you can use non-fungible tokens;
Link Physical Asset to a Blockchain Network
You can use NFT to link your physical assets or properties to a Blockchain network and protect it through the system.
Authentication of Art Ownership
NFT, through the Blockchain system, helps prove and protect ownership of digital assets. You don’t have to look over your shoulders when you secure your art or collectibles through NFT.
Games and Entertainment
You can earn tokens by playing most NFT games. Examples of NFT games are Cryptokitties and Axie Infinity, where you can earn tokens through a game-to-win system. Most people play the NFT games as an investment, and the token can be sold for money or cryptocurrency.
The NFT marketplace is an ever-evolving one, and it is not just a trend but a whole paradigm shift in the world of Blockchain. If you are vested in creating value or letting the world see and recognize your art, you may want to hop on it, especially if you are creative.